The Sukhvinder Singh Sukhu government of Himachal Pradesh has announced its decision to procure a loan of Rs 800 crore to finance developmental projects in the state. The loan includes Rs 300 crore to be repaid over a six-year period and Rs 500 crore to be repaid over eight years.
The government notifications clarify that the loan will be strictly allocated for the state’s developmental works. To secure the loan, the government plans to sell government securities through the Reserve Bank of India, utilizing a competitive tendering process. The successful bidder will be required to make the payment on June 7, 2023. Prior authorization from the Central Government has been obtained to proceed with this loan acquisition.
The decision to seek such a substantial loan underscores the financial challenges faced by the government of Himachal Pradesh. With modest revenue and consistently exceeding expenditures, taking on loans has become a necessary measure to fulfill the financial obligations of the government, including employee salaries and pensions.
It is noteworthy that the acquisition of loans has become a common practice for governments in Himachal Pradesh due to limited revenue streams. Relying on loans has become a necessity to cover routine expenditures and fund developmental projects. This reliance reflects the need to strike a balance between financial stability and the imperative to drive growth and progress in the state.
